Thursday, August 08, 2002

Imagine an Extreme Sports God that watched JACKASS and thought… I CAN BEAT THAT! Now, for my money, I want to see the XANDER ZONE show on TV for real. I want to see him punish Jack Valenti and the voting members of the MPAA. I want to see Xander unleashed on Joe Lieberman and Jesse Helms. I want to watch Xander bring down Televangelists and revisit their hypocrisy a thousand fold upon them. The aggressive guerilla terrorist against the corporate asses that brought us the disasters at ENRON and well…

Tuesday, August 06, 2002

Bruce Sterling over at Infinite Matrix points out that the crazier the country, the lower its level of telephone traffic with the outside world. Yes, indeed. However, the tariff maps are even more interesting. These scale the world map so that distances represent how much it costs to call the respective country from the United Kingdom or New York. The interesting thing of course is how similar the UK and US maps look to each other. If it costs $x to call a country from the UK, costs around the same amount to call it from the US. Distance isn't (largely) the issue. Politics is the issue.

This effect has grown even more dramatic since 1998, which is the last date for these maps, unfortunately. Traditionally, international phone calls were governed by the "settlements" system, in which two countries did a bilateral deal by which a certain (usually outrageous) amount of money was payable per minute for international calls. At the end of an accounting period, the total amount of calls was calculated, a net settlement charge was calculated, and the country that had originated more calls paid that amount to the country that had originated fewer calls. The actual telcos in each country could then charge their customers whatever they liked: normally the settlement charge, plus their costs, plus a fat margin for themselves.

This worked okay (except for the fact that customers were screwed) in the days of monopolies and outrageous telecommunications pricing, but once deregulation and competition started occurring, there were problems. Essentially, in the United States, carriers competed amongst themselves for international traffic, and this massively reduced their costs and their margins. However, the settlement price placed a floor under what they could charge, and this floor came to constitute pretty much all of the price of calls. This money was then given to the foreign carrier in its entirety. This money did not reflect the foreign carrier's costs in any way.

Therefore, it you set up a phone service in a foreign country where the settlement costs were high, and could get people in rich countries to call you, then phone carriers in the US were obligated to pay you money. Therefore, lots of phone sex services and premium services set up in foreign countries. (Particularly the Carribean, which had the added advantage of having phone numbers that did not look like international numbers to US callers). The US and European telephone carriers were obliged to collect the money for these services, and US and European customers had little recourse to any legal remedy to anything resulting from the calls. (t home, the only relevant laws were those dealing with international phone calls, rather than premium services).

Eventually the US decided that it had had enough of this, and simply placed a cap on settlement charges paid by US carriers. Ultimately either the foreign countries agreed to heed this or they were unable to connect their phone systems to the US. Various other countries followed the US lead. The international sex lines business declined in size.

The second thing that happened was that more countries deregulated and abondoned the settlements system entirely. In a lot of instances, local telephone companies were compelled (either by law or by competition) to charge the same termination fees to international carriers as to domestic long distance carriers. This dramatically reduced the cost of international calls. (At least, it did for business customers and domestic customers who pay attention. Many telcos are still happy to pay the dramatically reduced termination charges, but still charge high rates to domestic customers who still believe that international calls should be 'expensive'. There are alternatives for customers who understand the situation, however).

Countries now can be divided into those that have deregulated and those that are clinging to the remnants of the settlements system. We now have a situation where international calls can be divided into two categories. If you are calling from a deregulated country to another deregulated country, the call should not cost much more than a domestic call. If, however, one or both of the counrties in question is not deregulated, calls are much more expensive, although not as expensive as they once were. Distance has little to do with it. On the map, the deregulated countries exist in a small ring near the centre. Everyone else is a lot further away. (This has become much more dramatic since 1998).